Dana Incorporated · NYSE:DAN
Dana — Wolfe Research Global Auto Industry Conference 2019
27 slides from Dana's conference presentation, Jan 15, 2019
Slide 1: Wolfe Research Global Auto Industry Conference
J.P. Morgan Auto Conference August 8, 2017 Jonathan Collins Executive Vice President & Chief Financial Officer © Dana 2019 Dana Incorporated Wolfe Research Global Auto Industry Conference January 15, 2019 Jonathan Collins Executive Vice President and Chief Financial Officer James Kamsickas President
Slide 2: Safe Harbor Statement
Certain statements and projections contained in this presentation are, by their nature, forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations, estimates and projections about our industry and
Slide 3: Dana Snapshot
Founded in 1904 2018 preliminary sales: $8.1 billion ~30,000 people 21 technical centers 136 33 6 major facilities countries continents customers in countries 143 Dana Snapshot
Slide 4: Business Overview
Business Overview Technologies Drive Axles, driveshafts, transmissions, hydraulic wheel and track drives, drive units for electric and hybrid vehicles Motion Winches, slew drives, planetary gearboxes, hydraulic pumps, motors and valves, electronic controls Sealing Gaskets and seals, transmission sep
Slide 5: Overdrive: Strengthen the Core
SI OVERDRIVE ))) S Strengthen Customer the Core » Operational Excellence fanlelenaicesiing » Design & E1 » Manufact >>>) iii: © Dana 2019 5
Slide 6: Hybridization & Electrification
OVERDRIVE ))) Hybridization & Electrification =
Slide 7: Acquisition Benefits
Acquisition Benefits Completes in-house electrodynamic capabilities Establishes European e-Technology center of excellence Augments breadth of e-Drive systems offerings Strengthens Asia new energy market presence
Slide 8: Acquisition Snapshot
Snapshot Manufacturing in Europe and China $ 2019T Sales: ~$30M Purchase Price: $88M 2 Engineering Centers Sales by End Market Sales by Region Key Customers A Leader in Low Voltage Electrodynamic Components 4 Global Locations
Slide 9: Electrodynamic Technology
Electrodynamic Technology Acquisition establishes complete suite of electrodynamic technology Business Brands Motors Inverters / Controls Permanent Magnet High Low Induction Voltage Range
Slide 10: e-Propulsion Product Portfolio
e-Propulsion Product Portfolio Mild hybrid Battery Electric Vehicle (BEV) Independent e-Axle Primary Axle Hybrid Drive (P/HEV) Hybrid Axle Wheel Drives Hybrid Drive Unit Power Electronics Direct Drive Technology Solutions e-Drive Unit Rigid e-Axle Recreational Utility City Delivery Medium Duty Heavy
Slide 11: e-Propulsion Content Growth
e-Propulsion Content Growth Significant content per vehicle expansion opportunity >2x CPV ≈ CPV >2x CPV ICE Electric Full-Frame Light Trucks Medium-Duty Trucks Off-Highway Equipment
Slide 12: e-Propulsion Market Outlook
e-Propulsion Market Outlook Full-Frame Light Trucks Medium-Duty Trucks Off-Highway Equipment* All segments offer attractive market growth 43% CAGR 22% CAGR 25% CAGR *Excludes forklifts and scissor lifts 2018 2025 Source: Roland Berger and management estimates
Slide 13: Spicer Axles Driving the Future
Spicer Axles Driving the Future Delivers ~2% improvement in fuel economy to the end consumer The most efficient axle for automotive applications – a full 30% better than current best-in-class competitive products Provides 60 pounds of weight savings Light Vehicle Ultra-Efficient AdvanTEK® Axle Syste
Slide 14: Driving Growth
Driving Growth Industry-leading technology powering growth Multiple end markets provides cycle stability Investing for the future of mobility Significant new business wins in all segments
Slide 15: 2015 to 2018 Performance Improvement
2015 to 2018 Performance Improvement SALES ~$2.0 billion Adj. EBITDA ~$300 million Free Cash Flow ~$100 million Outstanding performance, outstanding future… 33% 47% 64% 67% Diluted Adjusted Earnings Per Share ~$1.15 Comparison based on 2015 results to preliminary 2018 results for sales, EBITDA and c
Slide 16: Outlook and Financials
J.P. Morgan Auto Conference August 8, 2017 Jonathan Collins Executive Vice President & Chief Financial Officer © Dana 2019 Outlook and Financials Jonathan Collins Executive Vice President and Chief Financial Officer
Slide 17: 2018 Preliminary Results
2018 Preliminary Results Sales surpassed high end of guidance range as Q4 demand exceeded expectations; however, conversion on the incremental sales was negligible as premium costs to fill the orders offset the added contribution margin and product mix was unfavorable Adjusted EBITDA landed near low
Slide 18: 2018 Preliminary Sales and Profit Changes
11.6% ~11.8% ~$465M Market ~$350M Backlog 2018 Preliminary Sales and Profit Changes ~17% conversion Sales growth of 13% compared with last year driven by conversion of backlog, improving end-market demand, a full year of the 2017 acquisitions, and recovery of commodity inflation ~85 bps of margin ex
Slide 19: 2019–2021 Sales Backlog: $700 Million
2019 – 2021 Sales Backlog: $700 Million Backlog ensures outperformance of market through 2021 Backlog includes booked incremental new business net of any lost replacement business Backlog is incremental to 2018 sales holding both foreign currency exchange rates and vehicle production volumes constan
Slide 20: 2019 Mobility Market Demand Outlook
2019 Mobility Market Demand Outlook 12018 preliminary sales including 100% of DDAC Heavy Duty Agriculture Construction Full Frame Medium Duty Mining Dana Impact 6% . 46% 28% 20% 100% 51% 28% 21% 100% North America Europe & Africa South America Asia Pacific Dana Impact Mobility Market Primary Source
Slide 21: 2019 Guidance
Sales Adjusted EBITDA Implied Profit Margin Implied FCF Margin Diluted Adjusted EPS 2019 Guidance Ranges Guidance Range Guidance Range Mid Point ~$1,025M ~$3.10 +/- $150M +/- $0.20 +/- $30M ~12.2% ~4.0% ~$8,400M ~$1,125M +/- $200M +/- $0.25 +/- $40M ~12.3% ~3.0% ~$9,150M Guidance Range w/ ODS ~$3.20
Slide 22: 2019 Sales and Profit Changes
11.8% 12.3% >30% conversion 2019 Sales and Profit Changes ~(60 bps) ~100 bps ~10 bps Poised to deliver $1B of sales growth and add $165M of profit Higher conversion on organic growth due to efficiency improvements as well as the benefit of structural costs actions taken in H2 of 2018 Overlap of Jeep
Slide 23: Key Financial Metrics Trends
Key Financial Metrics Trends Sales Adjusted EBITDA Free Cash Flow Diluted Adjusted EPS $1.94 $ in Millions $ in Billions $5.8 $7.2 A=Actual; P=Preliminary T=Target ~$8.1 See appendix for comments regarding the presentation of non-GAAP measures 9% CAGR $ in Millions ODS $660 $835 ~$957 $62 $161 ~$240
Slide 24: Strong Balance Sheet
($ in millions) YE 2018 Preliminary YE 2019 Pro forma Cash and Marketable Securities ~$525 ~$575 Revolver ~575 ~725 Liquidity ~$1,100 ~$1,300 Term Loan A ~$265 ~$460 Term Loan B ~445 Senior Notes ~1,500 ~1,500 Other Debt ~20 ~50 Total Debt ~$1,785 ~$2,455 Net Debt ~$1,260 ~$1,880 Adjusted EBITDA ~$9
Slide 25: Capital Allocation Priorities
Capital Allocation Priorities Organic Growth Inorganic Growth 1 2 Cash Repatriation 4 Capital Structure 3 Investing to deliver backlog generates attractive returns Targeting consistent capital spend levels at ~4% of sales Expand product technology Enhance geographic presence Reduce debt and pension
Slide 26: Investment Highlights
Investment Highlights Global Presence 1 Strong Market Demand 5 Broad Customer Base 2 Solid Balance Sheet 7 Expanding Profit & FCF Margins 6 Relevant Technology Portfolio 3 Significant Sales Backlog 4 Clear Investment Priorities 8
Slide 27: Adjusted EBITDA non-GAAP definition
The preceding slides refer to Adjusted EBITDA, a non-GAAP financial measure which we have defined as net income before interest, taxes, depreciation, amortization, equity grant expense, restructuring expense and, non-service cost components of pension and other postretirement benefits (OPEB) cost an
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